A senior central government official's estimate that 20 million migrant workers have returned to the countryside after losing their jobs in the cities underscores Beijing's concern about the impact of the global slowdown on the mainland's rural economy. The figure is twice the initial estimates, and officials say it could get worse. At the same time, Premier Wen Jiabao has said there is uncertainty whether China can maintain a growth rate of 8 per cent - the figure cited as the minimum needed to absorb an expanding workforce and prevent unemployment causing social unrest.

All this not only adds urgency to Beijing's 4 trillion yuan (HK$4.54 trillion) plan to stimulate the economy with infrastructure spending, Mr Wen has indicated that further stimulatory measures might be needed. China is fortunate to have ample reserves to call upon to finance its economic stimulus programme. There is no question the money can be well spent because the country will need to invest heavily in infrastructure such as roads, bridges and railways for many years to come. A precedent for the latest stimulus package is to be found in the wake of the Asian financial crisis of 1997, when Beijing stepped up infrastructure spending to support growth.

There are lessons to be learned, however, from countless examples of overinvestment, overcapacity, waste and corruption that have plagued such spending. Unless these lessons are heeded, mistakes are waiting to be repeated and the social and economic benefits of the stimulus package may be wasted. Beijing's spending measures will help the country through the downturn. But there is also a danger they will result in more underused power plants, airports, highways and buildings - and bad debt. Sadly, experience from the Asian crisis has shown that when the central government turns on the money tap, local government officials are prone to focus on the political kudos attached to economic growth, and the possibility of corrupt personal gain at the expense of social and economic value.